National agricultural market

New facility will boost trade on e-NAM

By launching a composite portal to provide agricultural marketing-related services through a single digital platform, the government has addressed a major lacuna that hindered the electronic National Agricultural Market (e-NAM) from serving as a unified pan-Indian bazaar for agricultural goods. Termed aptly the “Platform of Platforms” (POP), this facility would enable buyers and sellers to carry out trade across states without going through mandis run by agricultural produce marketing committees (APMCs) under the state marketing laws. Little wonder, therefore, that over 40 entities promptly joined the POP to provide essential services like quality assaying and certification; grading, sorting and packaging; warehousing; finance and insurance; and advisories on weather, crop forecasting, technical knowhow and prices. Even logistics and transportation facilities are available through this platform. It has, indeed, been the absence of such an integrated facility that has till now restricted trading through e-NAM largely to deals within the same mandis or among mandis of the same district or state. The inter-state deals, for which the e-NAM has specifically been created, have been too few.

The new facility, which has taken nearly a year to materialise, is expected to ensure smooth transactions of trade deals among buyers and sellers of different states by facilitating transparent price discovery. More importantly, it would help bypass APMC mandis, which are dominated by intermediaries (read arhtiyas) and follow their own sets of rules, levies, and service charges. Besides, the POP would enhance the farmers’ access to multiple markets, more buyers, and a wider choice of service providers. The process of expansion and upgrade of e-NAM has, indeed, been ongoing right from its inception about six years ago, but only in a piecemeal manner. As a result, its impact, too, has been gradual, though steady. The slow, but consistent, increase in the number of farmers and traders formally registered with e-NAM, and growth in the volume of trade conducted through it, bears this out.

Some significant reforms, aimed largely at de-linking the farm trade from APMCs, were carried out during the pandemic. The most notable among these involved permission to sell farm goods directly from warehouses and the premises of Farmers Producer Organisations (FPOs) without having to carry the produce to mandis. Although these reforms were triggered essentially by the need to decongest APMC markets, they provided the much-needed impetus for the growth of e-NAM as an effective market for agri-commodities. Warehouses and FPOs became virtually the aggregators of farm produce to sell it in bulk, taking advantage of scale and collective bargaining power. These advantages also came in handy to procure farm inputs on behalf of farmers.

Another noteworthy development that helped in the growth of e-NAM during the pandemic was the amendment to the APMC Acts by some states to allow traders to buy farm products directly from farmers outside mandis. States like Gujarat, Madhya Pradesh, Uttar Pradesh, and Rajasthan began issuing unified licences for trading through or outside APMC channels, though market levies had to be paid to APMCs for such transactions. The launch of the POP would now ensure hassle-free out-of-mandi trading of farm goods across the country through the e-NAM portal, thereby making it a truly common national agricultural market.